Using a unique regulation implemented in a developing financial market – the mandatory disclosure of macroeconomic and security-market outlooks required of all Chinese mutual funds – we construct direct measures of portfolio managers’ subjective expectations and their influence on asset allocation decisions. Despite their sophisticated skills, high-powered incentives, and access to extensive information,...

When there is uncertainty about a new product’s net value, firms treat the timing of the product launch as a real option. When the potential cannibalization costs imposed on existing products are important, the timing decisions are sensitive to competitors’ actions, as they affect these costs. In the pharmaceutical industry, we show that firms often delay new launches until generic entry threats ...

​We show the financial interests of a generic-drug manufacturer's largest shareholders in a branded competitor predict the generic's likelihood of being the first to challenge a drug patent. Conditional on a challenge, these common-ownership links predict settlements and delayed generic entry in exchange for payments to the generic. The stock price reactions are positive for the brand but negative for the generic, implying wealth transfers from one portfolio firm to another, with net benefits to investors. These facts suggest that in supracompetitive markets, corporate objectives depend on shareholder preferences.

How does output-price stickiness affect managers’ incentive to manipulate earnings and their firms' financing costs? We show firms with sticky-output prices experience more negative returns during tight windows around the Enron scandal and are more likely to misreport earnings when securities regulation is lenient, and their misreporting drops significantly after regulation becomes stringent. Sticky-price firms also face improved credit-market conditions following securities regulation. We build a model of earnings manipulation with endogenous manipulation costs to rationalize our empirical findings. The study suggests firms' stickiness in product pricing facilitates insiders' selfinterested behavior, imposing agency costs on firms.

This paper studies the expansion patterns of multinational enterprises (MNEs) in time and space Informed by a se

We analyze the problem of matching asylum seekers to member states, incorporating wait times, preferences of asylu

A recommendation platform sequentially collects information about a new product revealed from past consumer trials

We present a novel test to determine sparsity in characteristic-based factor models Applying the test to industry